A big advantage of using a 401(k) rather than other retirement saving tools is how much of the process can be automated. This is especially nice for families short on time who would prefer a passive approach to growing their wealth.

For those who may be new the 401(k) world, here are three ways your 401(k) can be automated. I hope you’ll consider these advantages when deciding whether to start or continue using your 401(k).

Automatic Enrollment

Many employers will automatically enroll employees into their company 401(k) plan. While some people aren’t keen on being forced into anything, this approach has some unique advantages.

The most obvious benefit of automatic enrollment is it removes the work of deciding to enroll, when to do it, and spending the time to make it happen. Taking on a new job brings a flood of new obligations that take up your time: employee orientation, getting acquainted with new a manager and teammates, and perhaps finding a new place to live. Setting up your 401(k) may fall to the bottom of the list amidst these and many other responsibilities. Automatic 401(k) enrollment removes one big item from you to-do list. It’s already done for you.

Investors automatically enrolled in 401(k) plans also tend to stick with them over time and subsequently have more dollars in their plans than those who have to sign up themselves. This suggests that the upfront work and intimidation factor of employees enrolling in their 401(k) can be overcome by the employer taking the wheel early on.

Of course, you can always opt-out of employer-imposed 401(k) enrollment if you choose. The question is - would you really want to?

Automatic Contributions

Contributions are the dollars you put into your 401(k). Since your 401(k) is run through a “partnership” of sorts between your employer and the Plan Administrator, you can automate your 401(k) contributions directly from your paycheck.

Contributions can be for any amount, up to the maximum 401(k) contribution limits, which are $18,000 in 2016. Most Plan Administrators suggest starting with 10% of your salary or at least enough to earn the full match from your employer.

For now, don’t be so concerned about how much you’re contributing, as automating those contributions. This will save you an extraordinary amount of time in the future and will help you discipline your investing habits by consistently contributing. Anytime you want to adjust your contribution amounts you can do so.

Automatic Investment Allocations

In addition to automating your contributions, you can also automate where your invested dollars go within your 401(k). Once you’ve made your investment selections, the future contributions going into those investments can be fully automated as well.

By adjusting the allocation percentages, you can tell your Plan Administrator how you want your contributions allocated. For example, you might direct 40% of each contribution to a stock index fund and 60% to a bond index fund. You can select any variety of investment allocations by using different percentages, as long as they add up to 100%.

If you’re feeling intimidated with choosing your investments,you’re not alone. For many, this is probably the scariest part of 401(k) investing. It feels like a step where a lot can go wrong if a poor choice is made.

It may be worth calling your 401(k) Plan Administrator to talk with an investment professional, or talking with a financial advisor (like me!). They can provide some guidance if you’re uncomfortable choosing your own investments.

Automation for the Win

These three features - automatic enrollment, automatic contributions, and automatic investment allocations - are some of the greatest yet underappreciated virtues of using a 401(k) for building your wealth. It takes a great deal of the work out of managing your 401(k). They also ensure that you are consistently contributing to your 401(k) and that those contributions are going to the right place.

Photo credit: Steve Jurvetson. Used under CC license 2.0